Russian Central Bank estimates Russian Q1 GDP growth at 4.6%, expects 4.4% growth in Q2

MOSCOW. May 13 (Interfax) - Russia's GDP growth in the first quarter of 2024 totaled 4.6% in annual terms, the Russian Central Bank said in its commentary on the GDP medium-term forecast released on Monday (the forecast was published at the end of April).

The Central Bank expects growth of 4.4% in annual terms in Q2, with a further slowdown to 0.5%-1.5% in the fourth quarter of 2024.

"According to the Bank of Russia's forecast, starting in the second quarter of 2024, the current GDP growth rate will slow down under the influence of the growing effects of tight monetary conditions. The main driver of growth will continue to be high consumer and investment demand. According to the Bank of Russia's forecast, economic activity will grow in 2024 at the level of 2.5%-3.5%. Economic growth in 2025, including under the influence of previously adopted decisions on monetary policy, will reach 1.0%-2.0%. As such, investment demand will grow, reflecting a shift in the structure of aggregate demand in the Russian economy towards an increase in the share of investment. As interest rates fall and the economy returns to balanced growth in 2026, the contribution of consumer demand to GDP growth will increase 1.5-2.5% in 2026," the Central Bank said in its commentary.

As reported, the Ministry of Economic Development previously estimated the growth of Russia's GDP in the first quarter of 2024 at 5.4%. Rosstat's assessment of Russian GDP dynamics for the first quarter of 2024 will be published on May 15.

The Bank of Russia improved its forecast for Russian GDP growth in 2024 on April 26 to 2.5%-3.5% from 1.0%-2.0% in the February version. Meanwhile, the Central Bank maintained its forecast for economic growth in 2025 in the range of 1.0%-2.0%, and 1.5%-2.5% in 2026.

The April forecast from the Ministry of Economic Development for GDP growth in 2024 is 2.8%, 2.3% in 2025, and 2.3% again in 2026.